04 Aug Expiration of Statutes and Collection of Back Taxes for Truckers
Many taxpayers aren’t aware of the IRS’s 10-Year Statute of Limitations. Naturally, the IRS doesn’t advertise its 10-year rule for forgiving debt to prevent taxpayers from thinking that waiting it out is a way to avoid paying taxes legally. Under this rule, the IRS can go after you for your unpaid taxes for up to ten years from the date they were assessed, which you will find on the Notice of Deficiency that the IRS will serve you. Once the ten years are up, the private agencies the IRS uses to collect tax debt must give up its collection efforts and write off the debt.
While holding out for ten long years to avoid paying tax debt may seem like a good idea, understand that the IRS will likely turn to more aggressive collection methods leading up to the Collection Statute Expiration Date (CSED). If you don’t act on the Notice of Deficiency, the IRS begins the collection process. And if you fail to pay each month, your debt continues to grow thanks to penalties and interest rates. Once your debt passes a certain limit, the IRS may impose levies on your accounts and property. At some point, you may no longer be able to operate your trucking business, particularly if your property has been seized to make good on your tax liability.
The Importance of Paying Back Taxes
During these challenging times, it’s understandable that some truckers are facing tax bills that they’re struggling to pay. However, not filing and owing taxes for at least one year that have accumulated interest and penalties can trigger the IRS to begin the collection process and enforce tax laws. Fortunately, there are tax debt relief options for back taxes, such as penalty abatement, offer in compromise, and installment agreements.
Because each tax relief method requires special qualifications, it helps to consult with a tax professional to determine which approach applies to your circumstances. For example, not all trucking businesses will qualify for an IRS installment agreement. And depending on your ability to pay your tax debt, maybe an extension is all you need.
Tax experts can also help you calculate your back taxes to ensure you’re not paying more than you should, ensuring that you don’t fall deeper into debt. More importantly, a tax negotiation and mediation firm may help you reduce or avoid certain interests and protect your rights should the IRS’s collection methods become too aggressive.
Good recordkeeping is critical to operating your trucking business successfully. As an owner-operator, you will be responsible for calculating and paying taxes to State and Federal agencies yourself. But if you owe back taxes, it may help to consult with a tax professional to see if you can benefit from specific tax relief methods.
Do you have questions about your back taxes or have tax debt that’s going through the collection process? As tax resolution experts, we specialize in collection appeals, liens, penalty abatement, and the expiration of statutes. Contact Golden Tax Relief today!